This guide is maintained as a current resource for September 2026 and covers only the laws of England and Wales. Information is for general guidance, not legal advice. Consult a qualified solicitor for advice specific to your situation.
Learn how to claim for innocent misrepresentation in England and Wales, including the legal definition, required elements, remedies such as rescission and damages in lieu, procedural steps, time limits and practical guidance for pursuing a statutory misrepresentation claim.
Innocent misrepresentation arises when a person makes a false statement of fact that leads another into a contract, but honestly believes the statement to be true and has reasonable grounds for that belief. Unlike negligent or fraudulent misrepresentation, there is no fault in the representor's belief at the time of making the statement. Innocent misrepresentation can still give rise to legal remedies under English contract law, particularly through the Misrepresentation Act 1967, which provides for contract rescission and, in limited circumstances, damages in lieu of rescission. Understanding how to bring a claim is important for anyone dealing with disputes where a misunderstanding of fact has influenced contractual decisions.
What Is Innocent Misrepresentation?
Innocent misrepresentation is a misrepresentation that is made without fault. The representor genuinely believed the statement to be true at the time it was made and had reasonable grounds for doing so. This distinguishes innocent misrepresentation from negligent misrepresentation (which involves carelessness) and fraudulent misrepresentation (which involves dishonesty).
To qualify as an innocent misrepresentation:
- The misrepresentation must be a false statement of fact or law made before or at the time of contract formation.
- The claimant must show they relied on the statement when entering into the contract.
- The maker of the statement must genuinely have believed it to be true with reasonable grounds up to the point of contracting.
If these conditions are met, the contract may be voidable at the claimant's option, allowing for certain remedies to be pursued.
Legal Framework and Remedies
Rescission
The primary remedy for innocent misrepresentation is rescission. This remedy seeks to undo the contract, treating it as if it had never existed and restoring both parties to their pre‑contract positions where possible. Rescission is an equitable remedy, so the court has discretion to grant it and may refuse if it would be inequitable.
Rescission may be refused if, for example, the innocent party has affirmed the contract after learning of the misrepresentation, if third‑party rights have intervened, or if it is impossible to restore each party to their original positions.
Damages in Lieu of Rescission
Under Section 2(2) of the Misrepresentation Act 1967, a court may award damages in lieu of rescission for innocent misrepresentation where it considers it equitable to do so. This is a discretionary remedy and depends on factors such as the nature of the misrepresentation and the losses suffered. Damage awards under this provision are typically based on contractual principles, unlike negligent misrepresentation where damages may align with tortious loss.
The Act also removes certain common law bars to rescission, such as where the representation has become a term of the contract or the contract has been performed.
Step‑by‑Step: Bringing an Innocent Misrepresentation Claim
1. Identify the Misrepresentation
Start by identifying the specific statement that was false. The statement must have been made before or at the time of contracting, and it must be more than sales puffery or opinion; it must refer to fact or law.
For example, a seller stating that equipment meets certain regulatory standards, when in fact that is incorrect, may qualify as a statement of fact if relied on in contract decisions.
2. Demonstrate Reliance and Causation
You must show that you relied on the misrepresentation when entering into the contract, and if you had known the truth, you would not have entered or would have done so on different terms. Contemporaneous correspondence, pre‑contract negotiations and internal business records can help demonstrate reliance.
3. Establish Reasonable Grounds for Belief
Although innocent misrepresentation does not require fault, you must establish that the representor honestly believed the statement to be true and had reasonable grounds for that belief. If evidence suggests the representor was careless, the claim may instead be treated as negligent misrepresentation.
4. Seek Remedies
Once you have identified and evidenced the misrepresentation, you can pursue remedies:
- Rescission - Apply to court for the contract to be set aside.
- Damages in lieu of rescission - Request the court exercise its discretion under Section 2(2) of the Misrepresentation Act 1967 to award compensation instead of unwinding the contract.
In practice, claimants often set out both alternative remedies in their claim pleadings to ensure the court can consider rescission and, if appropriate, damages.
Procedural and Practical Considerations
Limitation Periods
Under the Limitation Act 1980, claims based on misrepresentation must generally be brought within six years of the date of entering into the contract. If the misrepresentation was not discovered at that time, discoverability principles may apply, but advice should be sought early.
Interplay with Contract Terms
Contracts often include entire agreement clauses or non‑reliance clauses to limit reliance on pre‑contract representations. Under Section 3 of the Misrepresentation Act 1967, clauses seeking to exclude or restrict liability for misrepresentation may be of no effect unless they satisfy the reasonableness test under the Unfair Contract Terms Act 1977. This provides protection against attempts to contract out of basic misrepresentation remedies.
Pre‑Action Steps
Before commencing proceedings, it is good practice to send a Letter Before Action setting out the misrepresentation, reliance, losses and remedies sought. This can prompt settlement or negotiation and is expected under pre‑action protocols for civil disputes.
Common Questions
Can I seek damages as well as rescission?
Not typically. Under Section 2(2) of the Misrepresentation Act, the court may award damages in lieu of rescission, but you cannot generally obtain both if rescission is granted.
Does innocent misrepresentation apply only to written contracts?
No. Misrepresentation can arise from oral statements, written documents or conduct if they meet the legal criteria and induced contract formation.
What happens if the contract has been partly performed?
Innocent misrepresentation can still allow rescission even if the contract has been performed, as the Misrepresentation Act removes certain historical bars to rescission. However, equity may limit rescission if restitution is impractical or inequitable.
Key Takeaways
To claim for innocent misrepresentation in England and Wales, a claimant must show a false statement of fact induced the contract and that the maker genuinely and reasonably believed the statement to be true. Remedies include rescinding the contract and, at the court's discretion, awarding damages in lieu of rescission under Section 2(2) of the Misrepresentation Act 1967. Careful evidence of reliance and understanding of procedural rules and limitation periods are key to pursuing a successful claim.
